Mike Ashley pounces after Debenhams coup

Debenhams chairman Ian Cheshire steps down with immediate effect

Debenhams chairman Ian Cheshire steps down with immediate effect

He was appointed chairman in April 2016.

A total of 56% of shares voted were against the re-election of both directors.

Ashley wants a closer relationship between Debenhams and his struggling House of Fraser department store chain - which Sports Direct bought out of administration in August.

The coup led by Ashley, the controversial founder of the U.K.'s largest sporting goods chain, stirred speculation he may look to combine Debenhams with House of Fraser, another struggling retailer he rescued past year.

The moves came after another plunge in sales left the department store group fighting for its survival.

The retail tycoon, who owns just under 30% of the department store chain through Sports Direct, teamed up with fellow shareholder Landmark to eject Sir Ian Cheshire and Sergio Bucher from the board.

"The board is mindful of its responsibilities to all shareholders and has full confidence in Sergio and in the management's plan to reshape the business".

The moves also raised questions about Bucher's role, since it's unusual for a CEO not to hold a director's position.

Debenhams plc, in its trading update for the 6 weeks and the 18 weeks to January 5, 2019 said that against a challenging market backdrop, the group is now on track to deliver current year profits in line with market expectations, supported by further identified cost savings.

"In the meantime, the board remains open to constructive suggestions from shareholders that are in the interests of the business as a whole".

However, the board and Mr Bucher agreed that he should continue as CEO and report to the board, Debenhams said.

Since 2016, Debenhams stock has lost roughly 90 percent of its value.

"The dramatic and sustained decline in Debenhams' fortunes in the last three years is not simply down to wider physical retail market challenges", Suzy Ross, senior adviser at Accenture Retail, said by email.

"Whilst it is right that I step down today, I wish the team at Debenhams every success in the future", he added.

The company's pre-tax profit has fell from more over £100m to just £32m in 2018.

After a slow start to the season, group digital sales rose 6 percent in the 6 week period over peak against a strong comparative performance, delivering two year growth of over 20 percent supported by improved mobile conversion and customer experience.

An overall like-for-like sales decline of 3.4 per cent was driven by a 3.6 per cent drop in United Kingdom like-for-likes.

Earlier, Debenhams said like-for-like sales dipped by 3.4 per cent in the six weeks to January 5, but it defied fears of a profit warning.

It was an all time record loss in the retailer's 240-year history.

The firm has embarked on a major strategic shift, including the closure of 50 branches and the launch of a new store design concept.